Having a place where you call it your home is a dream come true! But with that comes a big budget which most of the people are unable to afford due to other financial commitments. This is where mortgage insurers help us to make our dream into reality.
Mortgage insurer comes into picture when borrower’s down payment is less than 20% of the total purchase price of property. Before taking any insurance the borrower should calculate his expense as there is a high risk that income can be cut off and expense can increase or the rate of interest can be increased. So, the borrower needs to make sure that his loan amount does not exceed 40% of his income and the house amount is 32% of his total income.
Mortgage insurer makes sure that lender is not suffered if the borrower is unable to pay the amount or die due to unexpected circumstances. Mortgage insurers have different programs which help you to purchase your home.
There are many mortgage insurers in Canada which provide you tips and loans with different programs based on your gross income. The Canada Mortgage and Housing Corporation (CMHC), Genworth Canada, and Canada Guaranty are the mortgage insurer which assess any risk of borrower defaulting on loan and charge the premium to cover this risk. The premium is the loan amount which is added to the borrower’s mortgage payment.
It is better to go for a mortgage insurer as it will help you to purchase the home of your dreams with less risk and better premium plans. The mortgage insurer helps to increase the homeownership rates and it also promotes stability in the housing market.